St. Louis Park is dropping the contractor that was supposed to build the nation's first solar-powered citywide wireless Internet service. It will soon look for a new partner.
The City Council voted Monday to find Maryland-based Arinc in default of its contract with the city. It's the first step in dissolving the contract entirely.
"As my father said before he ended his marriage: Never remain loyal to a bad idea," said Mayor Jeff Jacobs.
Although the city has pledged to continue talks with the company, a fight is likely over who gets what and who owes whom. That battle could include a lawsuit.
In a meeting with Arinc last week, city staff members said they would reconsider recommending the council find the company in default if Arinc proposes a compromise that includes monetary damages for the project's repeated delays and technical failures, among other things.
The city estimates the delays have cost it $300,000 in lost revenue.
Arinc's Ruth Hough, vice president of network solutions, responded in a letter Monday saying: "We believe that the City's default is premature."
She said the company would be able to deliver citywide service by August 2008, and that Arinc has not been the sole cause of months of delays.
Hough's letter noted that the city paused setup last spring after residents complained about the look and location of the 16-foot-tall wi-fi poles. Thus, "damages for current delays are not appropriate," she wrote.
Also, the company proposed that damages to the city be set at $1,000 a day capped at $100,000. And it offered to pay $955,000 of an additional $1.5 million needed in hardware if the city paid $545,000.
The company's proposal is "very lacking" and "significantly short" of the city's expectations, City Manager Tom Harmening said.
The city's contract with Arinc is performance-based, and the city believes the company has not delivered the speed and capacity of service promised.
Over the weekend, the city tested three of four segments of one section of service, in the northeast part of the city. Staffers sat directly underneath the radios and used calibrated laptops to find out if they could get service at three megabytes per second.
In the smallest segment, they found 100 percent of the radios -- which work much like the network's modems -- to be functioning. In the second segment, 91 percent were functioning. In the third, 72 percent were functioning.
The city expects that 100 percent of the radios should function in this first phase of testing, and an average of 83 percent is unacceptable, said Clint Pires, the city's chief information officer.
"We have evidence that the technology they're using should and can work," Pires said. "This is a question of how Arinc has chosen to implement that technology."
But Arinc, in its letter to the city, disputed the testing methods and said it believes it is "delivering the performance required."
"What we require is that Arinc not be held accountable for network interference that is outside of Arinc's control," the letter reads.
The technical problems are unrelated to solar power, Harmening said. The solar panels are properly charging batteries powering the system's radios.
The council's vote was unanimous, with Council Member Paul Omodt abstaining, as he has on all wi-fi service issues because of a conflict of interest.
For now, the city is telling the more than 4,000 residents who have pre-registered for the city's Internet service to find another provider, Pires said.
"It's only honest to tell them to look elsewhere," Pires said.
Unplugged Cities, the company contracted to run the network once it's built, is offering DSL or dial-up service for those residents at discounted rates -- no long-term contract required. Jenna Ross • 612-673-7168